RITA Medical Systems Announces Fourth Quarter, Year-End Results
Total sales for the fourth quarter of 2002 were $3.7 million with a net loss of $3.1 million, or a loss per share of $0.20, compared to total sales in the prior year's fourth quarter of $4.0 million with a net loss of $3.8 million, or a loss per share of $0.26. U.S. sales for the fourth quarter were 76 percent of total sales, compared with 65 percent of sales for the same period in 2001. Disposable sales for the fourth quarter of 2002 represented 80 percent of total sales, as compared to 82 percent for the year earlier period and 79 percent for the third quarter of 2002. Gross margin in the fourth quarter of 2002 was 69 percent, compared with 70 percent in the same period last year and 61 percent in the 2002 third quarter.
Barry Cheskin, RITA's President and Chief Executive Officer, commented, "This past year has been a banner year for the company. We secured FDA clearance for bone, effectively doubling the size of our potential market; we presented survival data in liver cancer showing that three years after diagnosis, approximately 40-60 percent of the patients treated with RITA were alive compared to 10 percent who were alive without it; we released several major new products; we grew the top line, including more than 60 percent year-over-year growth in the U.S. and we reduced our quarterly operating losses significantly, as we head toward profitability."
Cheskin added, "2003 is going to be another exciting year for RITA, with continued top line growth, improving earnings, additional new products and expected early success in the commercialization of our bone application."
For the full year 2002, total sales grew 18 percent to $17.4 million with a net loss of $13.5 million, or a loss per share of $0.91, compared to total sales in the prior year of $14.8 million with a net loss of $13.0 million, or a loss per share of $0.90. U.S. sales in 2002 rose 61 percent to 74 percent of total sales, up from 54 percent of sales in 2001. Gross margin for the full year 2002 improved to 60 percent, compared to 59 percent in 2001. These improvements in 2002 were offset by increased investment in sales and marketing compared to 2001.
The balance sheet at December 31, 2002, showed cash, cash equivalents, and marketable securities of $12.8 million. Subsequent to year-end, the company raised an additional $9 million (gross proceeds) in a private placement transaction. At year end, the current ratio stood at 5.7:1, total assets were $24.2 million, shareholders' equity was $20.6 million and the company had no debt.
Webcast Information
Management will host a conference call to be broadcast live on the
Internet today at 11:30 a.m. EST (Eastern). Those interested in listening to
the live webcast may do so by going to the Investors/Calendar of Events
section of the Company's website at http://www.ritamedical.com/ or at
http://www.viavid.com/ .
About RITA Medical Systems, Inc.
RITA Medical Systems develops, manufactures and markets innovative products for patients with solid cancerous or benign tumors. The proprietary RITA system uses radiofrequency energy to heat tissue to a high enough temperature to ablate it or cause cell death. While the Company's current focus is on liver cancer and metastatic bone cancer, the Company believes that its minimally invasive technology may in the future be applied to other types of tumors, including tumors of the lung, breast, uterus, prostate and kidney. The Company has received regulatory clearance in major markets worldwide, including the United States. In March 2000, RITA became the first radiofrequency ablation company to receive specific FDA clearance for unresectable liver lesions in addition to its previous general FDA clearance for the ablation of soft tissue. In October 2002, RITA again became the first company to receive specific FDA clearance, this time, for the palliation of pain associated with metastatic lesions involving bone. The Company has sold over 45,000 of its disposable devices throughout the world.
The statements in this news release related to the Company's projections regarding sales, earnings, new products, its plans to extend the technology to applications beyond the liver and the company's projections of the market potential related to liver and non-liver applications are forward-looking statements involving risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. Potential risks and uncertainties could include, but are not limited to, the Company's dependence on timely market acceptance of the RITA system, the outcome of current patent actions, the Company's history of operating losses and expectation that it will continue to incur significant operating expenses over the next several years, significant competition in the Company's industry, alternative therapies which could prove to be superior to the RITA system, the Company's lack of long-term clinical data, the Company's inability to protect its intellectual property, potential intellectual property lawsuits, the company's dependence on international revenues, the Company's dependence on third-party distributors including two primary international distributors, the Company's dependence on third party suppliers and the need to establish reimbursement from payors in the United States and internationally. Further information regarding these and other risks is included in the Company's filings with the Securities and Exchange Commission.
RITA and StarBurst are trademarks of RITA Medical Systems, Inc.
For further information, please contact: investors, Matt Clawson,
matt@allencaron.com , or media, Len Hall, len@allencaron.com , both of Allen &
Caron Inc, +1-949-474-4300, for RITA Medical Systems, Inc.; or Don Stewart,
Chief Financial Officer of RITA Medical Systems, Inc., +1-650-314-3400,
dstewart@ritamed.com .
RITA MEDICAL SYSTEMS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share data, unaudited)
Three Months Ended Year Ended
December 31, December 31,
2002 2001 2002 2001
Sales $3,715 $4,011 $17,393 $14,791
Cost of goods sold 1,137 1,220 6,908 6,132
Gross profit 2,578 2,791 10,485 8,659
Operating expenses
Research and
development 1,170 1,652 5,052 6,489
Selling, general
and administrative 4,529 5,107 19,366 16,646
Total operating
expenses 5,699 6,759 24,418 23,135
Loss from operations (3,121) (3,968) (13,933) (14,476)
Interest income and
other expense, net 67 207 434 1,516
Net loss $(3,054) $(3,761) $(13,499) $(12,960)
Net loss per share,
basic and diluted $(0.20) $(0.26) $(0.91) $(0.90)
Shares used in
computing basic
and diluted
net loss per share 15,109 14,514 14,890 14,353
Financial data
exclusive of
amortization of
deferred stock-based
compensation:
Sales $3,715 $4,011 $17,393 $14,791
Gross Profit 2,568 2,831 10,527 9,218
Net loss (2,938) (3,806) (13,045) (11,589)
RITA MEDICAL SYSTEMS, INC.
CONDENSED BALANCE SHEETS
(In thousands, unaudited)
December 31, December 31,
2002 2001
Assets
Current assets:
Cash and cash equivalents $6,888 $7,297
Marketable securities 5,947 11,887
Accounts and notes receivable, net 2,798 5,056
Inventories, net 3,521 3,645
Prepaid assets and other current assets 995 1,282
Total current assets 20,149 29,167
Investments -- 4,353
Long term notes receivable, net 381 --
Property and equipment, net 1,565 1,934
Other assets 2,071 380
Total assets $24,166 $35,834
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued liabilities $3,563 $3,497
Current portion of long term obligations -- 192
Total current liabilities 3,563 3,689
Stockholders' equity 20,603 32,145
Total liabilities and stockholders' equity $24,166 $35,834
SOURCE RITA Medical Systems, Inc.